Redesigning_Federal_Health_Insurance_Policies_to_Promote_Children’s_Mental_Health

THINK BIGGER DO GOOD
POLICY SERIES
Redesigning Federal
Health Insurance
Policies to Promote
Children’s Mental
Health
Kimberly Hoagwood, Ph.D.
Cathy and Stephen Graham Professor and Vice Chair for Research,
New York University & Vice Chair for Research, Department of
Child and Adolescent Psychiatry, NYU School of
Medicine, Langone Health
Kelly Kelleher, M.D., M.P.H.
Director, Center for Innovation in Pediatric Practice
& Vice President, Community and Health Services Research,
The Research Institute at Nationwide Children’s Hospital
Michael Hogan, Ph.D.
Principal, Hogan Health Solutions
Fall 2018

Redesigning Federal Health Behavioral Insurance Health Policies and the to Individual Promote Health Children’s Insurance Mental Market Health

Dear Reader,
Now is a time of change in health and human services policy. Many of the changes could have profound
implications for behavioral health. This paper is one in a series of papers proposing solution-oriented
behavioral health policies.
The past decade has been a time of steady advances in behavioral health policy. For example, we have
met many of the objectives related to expanding health insurance coverage for people with behavioral
health conditions. Coverage is now expected to be on a par with that available to individuals with any
other health conditions, although parity implementation has encountered roadblocks. Coverage of evidencebased
treatments has expanded with insurance, but not all of these services are covered by traditional
insurance, necessitating other sources of funding, such as from block grants.
Much has improved; much remains to be accomplished.
As funders, The Thomas Scattergood Behavioral Health Foundation and Peg’s Foundation believe that
now more than ever philanthropic support in the area of policy is critical to improving health outcomes
for all. We ask that you share this paper and the others in the series with your programmatic partners,
local, state, and federal decision makers, advocacy organizations, and voters.
We believe that these papers analyze important issues in behavioral health policy, can inform policymaking,
and improve health outcomes. In the back of the paper, there are suggested ways of how one
can use the paper to further share these solution-oriented ideas and advocate for change. We hope these
papers help to extend progress and avoid losing ground at a time of change in policy.
Sincerely,
Joseph Pyle, M.A.
President
Scattergood Foundation
Founding Partner of Series
Rick Kellar, M.B.A.
President
Peg’s Foundation
Founding Partner of Series
Howard Goldman, M.D., P.h.D.
Series Editor

We would like to acknowledge the following individuals for their participation in
the convening and the ongoing process that led to the conceptualization of the
papers in this series.
Colleen Barry, Ph.D., M.P.P.
Bloomberg School of Public Health at
John Hopkins University
Pamela Greenberg, M.P.P.
Association for Behavioral Health
and Wellness
Sandra Newman, Ph.D.
John Hopkins Bloomberg School of
Public Health
Cynthia Baum-Baicker, Ph.D.
Thomas Scattergood Behavioral
Health Foundation
Lisa Dixon, M.D., M.P.H.
Columbia University College of
Physicians and Surgeons,
New York State Psychiatric Institute
Sara E. Dugan, Pharm.D., B.C.P.P, B.C.P.S
Northeast Ohio Medical University
Arthur Evans, Ph.D.
American Psychological Association
Alyson Ferguson, M.P.H.
Thomas Scattergood Behavioral
Health Foundation
Richard Frank, Ph.D.
Harvard Medical School
Rachel Garfield, Ph.D.
Kaiser Family Foundation
Aaron Glickman, B.A.
Perelman School of Medicine,
University of Pennsylvania
Howard Goldman, M.D., Ph.D.
University of Maryland School of Medicine
Kimberly Hoagwood, Ph.D.
New York University School of Medicine
Michael Hogan, Ph.D.
Case Western Reserve University
School of Medicine
Chuck Ingoglia, M.S.W.
National Council for Behavioral Health
Sarah Jones, M.D. Candidate
Thomas Scattergood Behavioral
Health Foundation
Rick Kellar, M.B.A.
Peg’s Foundation
Jennifer Mathis, J.D.
Bazelon Center for Mental Health Law
Amanda Mauri, M.P.H.
Thomas Scattergood Behavioral
Health Foundation
Brian McGregor, Ph.D.
Satcher Health Leadership Institute at
Morehouse School of Medicine
Erik Messamore, M.D., Ph.D
Northeast Ohio Medical Univerisity
Mark Munetz, M.D.
Northeast Ohio Medical University
Joe Pyle, M.A.
Thomas Scattergood Behavioral
Health Foundation
Lloyd Sederer, M.D.
New York State Office of Mental Health,
Mailman School of Public Health at
Columbia University
Dominic Sisti, Ph.D.
Scattergood Program for Applied Ethics
in Behavioral Health Care
Perelman School of Medicine,
University of Pennsylvania
Andrew Sperling, J.D.
National Alliance for Mental Illness
Hyong Un, M.D.
Aetna
Kate Williams, J.D.
Thomas Scattergood Behavioral
Health Foundation
Glenda Wrenn, M.D., M.S.H.P.
Satcher Health Leadership Institute at
Morehouse School of Medicine
Julia Zur, Ph.D.
Kaiser Family Foundation
Redesigning Federal Health Insurance Policies to Promote Children’s Mental Health
4

Titles in the Paper Series
Editors Howard Goldman, M.D., Ph.D. and Constance Gartner, M.S.W.
America’s Opioid Epidemic Lloyd Sederer, M.D.
Behavioral Health and the Individual Health Insurance Market: Preserving Key
Elements of Reform Richard Frank, Ph.D. and Sherry Glied, Ph.D., M.A.
Bringing Treatment Parity to Jail Inmates with Schizophrenia Mark R. Munetz,
M.D., Erik Messamore, M.D., Ph.D, and Sara E. Dugan, Pharm.D., B.C.P.P, B.C.P.S
Coordinated Specialty Care for First-Episode Psychosis: An Example of Financing
for Specialty Programs Lisa Dixon, M.D., M.P.H.
Employing People with Mental Illness in the 21st Century: Labor Market Changes
and Policy Challenges Richard Frank, Ph.D. and Sherry Glied, Ph.D., M.A.
Fentanyl and the Evolving Opioid Epidemic: What Strategies Should Policymakers
Consider? Colleen Barry, Ph.D., M.P.P.
Improving Outcomes for People with Serious Mental Illness and Co-Occurring
Substance Use Disorders in Contact with the Criminal Justice System Glenda
Wrenn, M.D., M.S.H.P., Brian McGregor, Ph.D., and Mark Munetz, M.D.
Medicaid’s Institutions for Mental Diseases (IMD) Exclusion Rule: A Policy Debate
Jennifer Mathis, J.D., versus Dominic A. Sisti, Ph.D. and Aaron Glickman, B.A.
Suicide Is a Significant Health Problem Michael Hogan, Ph.D.
The Current Medicaid Policy Debate and Implications for Behavioral Healthcare in
the United States Rachel Garfield, Ph.D., M.H.S. and Julia Zur, Ph.D.

Redesigning Federal Health Insurance Policies to Promote Children’s Mental Health
6

Redesigning Federal
Health Insurance
Policies to Promote
Children’s Mental
Health
Kimberly Hoagwood, Ph.D.
Cathy and Stephen Graham Professor and Vice Chair for Research, New York University
& Vice Chair for Research, Department of Child and Adolescent Psychiatry, NYU School of
Medicine, Langone Health
Kelly Kelleher, M.D., M.P.H.
Director, Center for Innovation in Pediatric Practice & Vice President, Community and Health Services Research,
The Research Institute at Nationwide Children’s Hospital
Michael Hogan, Ph.D.
Principal, Hogan Health Solutions

1
The Problem: Policies
Address Deficits Rather
than Promote Healthy
Development
Effective interventions to enhance child and adolescent mental health can be focused
on rehabilitation, treatment of acute conditions, prevention of new conditions,
or promotion of mental well-being. Although a growing body of science suggests
that the most cost-effective and moral solutions focus on early promotion and
prevention, the U.S. federal agencies that spend the most on child and adolescent
mental health continue to focus their payments on rehabilitative and treatment
services. Specifically, the federal Medicaid and Children’s Health Insurance Program
(CHIP) programs are the dominant revenue sources for behavioral health services to
children and adolescents in the U.S. Although there are other funding streams that
cover early education and developmental services for children (e.g., Maternal and
Child Health Services Block Grant [Title V, Social Security Act]; Head Start early intervention
services [via the Individuals with Disabilities Education Act, Part C]); Child
Care Development Block Grant; and the Maternal, Infant, and Early Childhood Home
Visiting Program), Medicaid and CHIP cover almost half of all children with special
healthcare needs. Medicaid and its Early Prevention, Screening, Diagnosis and Treatment
Program (EPSDT) and CHIP offer health and behavioral healthcare coverage for
children whose parents are unable to afford private health insurance. Although these
programs are designed nationally, they are administered at the state level.
Medicaid alone covers a total of 70 million individuals, including a large share of vulnerable
populations—32% of children (44.2 million) and 46% of pregnant women—and
has an annual cost of $475 billion to federal and state taxpayers. 1 However, because
Medicaid’s EPSDT and CHIP emerged from adult-oriented insurance models, they are
primarily oriented toward providing services when problems arise, rather than supporting
the conditions for children’s healthy development. Access to most services
under Medicaid requires that a licensed provider, in an approved or licensed site,
assign a diagnosis for an illness to an individual—meaning that to access behavioral
health services, a mental health problem has to have already developed.
Redesigning Federal Health Insurance Policies to Promote Children’s Mental Health
8

Children, however, are not small adults. Neurodevelopmental studies, animal models,
and studies of brain plasticity in infancy have established how important early
childhood is for forming capacities for lifelong development, 2,3,4 marking this as a
period of both great vulnerability and great opportunity. 5 The neural connections
that form the building blocks of brain development begin before birth and continue
into early adulthood. Therefore, early interventions can have profound and long-lasting
effects, and a wide range of interventions addressing neuro-regulation and social
relationships are effective. 6,7,8 Just under half of U.S. children experience at least
one adverse childhood event (ACE), and one in ten experiences three or more; these
negative events place them at high risk for later negative health and mental health
outcomes. Although a strong body of evidence traces the impact of ACEs on lifelong
development, 9,10,11 an equally strong body of evidence exists about effective prevention
and early intervention services to mitigate these negative outcomes. 12
Therefore, the opportunity is to redesign Medicaid, EPSDT, and CHIP so that they
optimize children’s development and functioning and promote the capacity for
lifelong health and quality of life. We recognize that the changes we suggest will not
affect all U.S. children, because these policies cover only a portion of the nation’s
child population—those in families with lower incomes. Nevertheless, making these
changes would set a precedent. We also recognize that decisions about modifications
are made at both federal and state levels and that there is considerable latitude
for states to adjust coverage. In this paper, we focus primarily on policy levers
where federal guidance to states will promote coverage likely to optimize children’s
healthy development. A thoughtful redesign will attend to the unique developmental
issues of children, including the systems in which they live, learn, and seek services
(i.e., home, school, neighborhood, and primary healthcare). We argue for a redesign
to explicitly address four issues with greater relevance to children’s development:
periodicity (i.e., the developmental continuum, requiring ongoing assessment of
functioning); provider capacity (requiring expansion of service providers to include
skilled nonprofessional providers and increased training); place or setting expansion
to offer continuous, coordinated, responsive, and flexible coverage across a range of
locations; and payment reform to ensure that services are adequately reimbursed in
different contexts and to promote investments in prevention and early intervention
programming. We conclude with specific recommendations.

2
The Need for Policy
Redesign: Four Key
Areas
Periodicity
An orienting feature that distinguishes children from adults is their developmental
plasticity. To promote and optimize children’s functioning, ongoing assessment and
monitoring of core functional markers is needed to guide the rapid deployment of interventions—as
conditions develop—for children with high-risk profiles (e.g., three or
more ACEs). Therefore, measurement and monitoring of children’s functioning over
time must be frequent (periodic) and coordinated across systems and must take into
account developmental change, proxy reports, and temporal stability of measures as
complicating factors in measurement psychometrics.
What Is Missing?
The current design of Medicaid’s EPSDT and CHIP falls short. The Center for Medicaid
and Medicaid Services (CMS) 2013 policy guidance 13 on the assessment of childhood
functioning recommends using the periodicity schedules set by Bright Futures
and standardized assessments (e.g., Ages and Stages Questionnaire and Pediatric
Symptoms Checklist) in general medical settings for children. These are necessary
but insufficient steps. These nonspecific recommendations are implemented poorly
in most settings. First, state EPSDT programs have noted consistent shortcomings in
the actual delivery of developmental and behavioral screening and treatment in primary
care and general medical settings. Second, Medicaid and CHIP reimbursement
policies exclude payment for behavioral health services provided in numerous other
settings that are not licensed or certified as specialty sites, where high-risk children
are often found, such as homes, general classrooms, juvenile justice settings, foster
care homes, and youth development programs. Third, current measurement standards
are not tied to key child functioning goals, such as kindergarten readiness,
third-grade literacy, or high school graduation. This is because pediatric measures
for state reporting are focused narrowly on follow-up after hospitalization or diagnosis-specific
services (e.g., for ADHD), not on functioning. The implication for providers
and payers: that the process of developmental and behavioral screening is more
important than outcome.
Redesigning Federal Health Insurance Policies to Promote Children’s Mental Health
10

Provider Capacity
There are substantial workforce shortages and a likely misallocation of providers
who care for children’s behavioral health. This includes shortages of pediatricians,
case managers, special education teachers, social workers, psychiatrists, and behavioral
healthcare workers, particularly in rural areas. 14,15,16,17,18 Coupled with these
workforce shortages are issues around lack of training—especially in developmental
assessment and psychosocial interventions—for general healthcare providers,
teachers, and other frontline professionals who work with children. Training deficits
are most pronounced in knowledge about basic developmental competencies,
recognition of behavioral health issues, and evidence about effective early interventions.
19,20 There are too few specialists, and the generalists do not understand the
emerging science on mental health promotion, prevention, and early intervention
that could alter the trajectory of many children.
What Is Missing?
Policy guidance is absent to support widespread workforce training on the use of
effective prevention and early intervention programs. Also absent is guidance promoting
expansion of the behavioral health workforce to include family peer support,
youth peer support, and telemedicine. These are low-cost, acceptable, and effective
alternative services. Medicaid guidance on funding sources for family and youth
peer support services and telemental health for children is inconsistent and poorly
understood or applied. The most recent federal guidance on peer support 21 provides
only general guidelines on scope of and access to peer support services. Some states
are using Medicaid administrative matches to pay for these services. Similarly,
federal guidance continues to support low reimbursement rates for telemedicine,
compared with reimbursement for face-to-face services.

Place
Promoting children’s behavioral health and resilience is most effective when
services can be provided in places where young children develop that include
nontraditional healthcare settings, such as homes, schools, and other natural
contexts (e.g., childcare settings and faith-based settings). This is because many
effective interventions focus on improving skills of parents and other primary
caregivers (e.g., early education staff). It also means that providers (i.e., case
managers, early learning specialists, and healthcare specialists) need to be trained
in how to provide services within these nontraditional settings. However, both
Medicaid’s EPSDT and CHIP favor delivery of services in more traditional settings
(i.e., outpatient and hospital-based settings).
What Is Missing?
The provision of services in nontraditional mental health service settings, such
as in the home and in childcare settings, is covered under Medicaid’s Home and
Community-Based Services Waiver program, which also includes the provision of
intensive in-home services, but these services are largely case management for
already identified “patients,” and coverage in schools is limited. The covered services
do not currently include prevention or promotion services.
Redesigning Federal Health Insurance Policies to Promote Children’s Mental Health
12

Payment
Paying for children’s prevention and health promotion services requires thinking differently about
return on investment, the balance of long-term savings vs. short term gains, and the availability of
appropriate codes with which to support these services (i.e., nonmedical necessity).
What Is Missing?
There is no code enabling reimbursement for monitoring or tracking of pediatric referrals to
behavioral health services, thus making it unlikely that follow-through will be tracked and measured
and that children will receive follow-up care. In addition, the current design incentivizes shortterm
contracts with managed care organizations, thus making long-term investments, which
could include prevention and early intervention programs, difficult to secure. The payment models
that exist are largely based on fee-for-service configurations. To address children’s developmental
functioning, however, and to ensure that no child is missed, population-based payments linked
to full accountability need to be integrated into policies. This could include pediatric accountable
care organizations (ACOs) and value-based purchasing mechanisms, discussed below in
recommendations.
There is no code enabling reimbursement for monitoring or
tracking of pediatric referrals to behavioral health services,
thus making it unlikely that follow-through will be tracked
and measured and that children will receive follow-up care.

3
Action Items for
Policymakers and
Advocates
1. Develop and Implement Measures That Assess
Children’s Development (Periodicity)
An important step is to develop measures that allow for frequent monitoring of
children’s development and functioning—measures that capture childhood’s incremental
changes, with explicit attention to modifiable community and neighborhood
factors 22,23,24 that have an impact on children’s health and development. Although
CMS’s 2016 overhaul of Medicaid managed care 25 requires states to collect a standard
set of encounter data, these data do not include periodic measurement of children’s
development. States are required to report on Healthcare Effectiveness Data and
Information Set (HEDIS) measures, but measures for children are focused largely on
hospitalization rates or on specific diagnoses (e.g., ADHD and depression). The National
Academy of Science, Engineering, and Medicine (NASEM) recommends an alternative
approach: the Vital Signs: Core Metrics for Health and Health Care Progress
report identifies 15 domains for capturing a range of health outcomes; however, most
of these domains are focused on adults, not children. 26 A recent initiative, organized
by NASEM’s Forum on Promoting Children’s Cognitive, Affective, and Behavioral
Health, is identifying developmentally responsive functional measures for children
to parallel or complement the broader Vital Signs work. The pediatric measures will
capture cross-system issues, especially important for children; account for continuity
of care and social determinants of health that comprise children’s environments;
and include community and neighborhood measures. 22,23,27
2. Expand the Range of Providers Whose Services
Are Reimbursable
There are limited payment options under current mainstream federal policies for services
delivered by professionals other than licensed medical or health providers. Federal
guidance is needed to clarify the competencies—not professional degrees—needed
by a wide range of professionals (e.g., early childhood paraprofessionals and parent
and youth peer support providers) who have the potential to provide evidence-based,
appropriate early intervention and prevention services. For example, only about a
Redesigning Federal Health Insurance Policies to Promote Children’s Mental Health
14

third of states currently use Medicaid funding for peer parent support services, 28
although evidence for these programs, as well as a national certification process
and pool of certified candidates, exists. And, although 34 states report that Medicaid
covers an “early childhood mental health specialist,” no state covers services that
aim to benefit an entire classroom or group of children through consultation or group
training activities. Opportunities also exist to expand provider capacity by increasing
federal reimbursement for telemedicine behavioral health coverage and for states to
expand their coverage of this service, which reaches rural areas where such services
are critically needed; currently, the Medicaid telemedicine provider reimbursement
rates are far below both Medicare and commercial insurance rates. 29
Recent federal efforts to increase workforce capacity via evidence-based training
and technical assistance do not cover early childhood prevention and intervention
programming or providers. They need to do so. The Substance Abuse and Mental
Health Services Administration’s recent program announcements for regional Mental
Health Technology Transfer Centers 30 and Prevention Mental Health Technology
Transfer Centers 31 represent a significant development. However, the announcements
focus on “those with serious mental illness” and “provide training and technical
assistance services to the substance abuse prevention field.” Neither of these
efforts is likely to provide training and technical assistance to help establish early
intervention programming needed for children and parents to remediate the effect
of ACEs and prevent mental illnesses from developing. This is a missed opportunity.
Some states are enacting statewide training initiatives to retool their current workforce,
including New York State’s Evidence-Based Treatment and Dissemination
Center and Minnesota’s Evidence-Based Practices initiative, both of which utilize
the Managing and Adapting Practice system. 32 States are also addressing workforce
shortages by creating credentialing processes to train and certify peer support
providers, including parents and youth. 33,34,35,36,37 Family peer advocates (FPAs) are a
group of providers whose work improves family engagement, access, and knowledge
about quality. 38,39,40,41,42,43,44 A national training and certification program also exists
for peer parent support providers in children’s mental health. 45 New York State has
made a significant investment in family peer support, training and certifying nearly
800 FPAs, and is expanding its training and certification efforts by using different
models (e.g., train-the-trainer), 46 including launching online training modules, 47 in
anticipation of the growing use of FPAs now that Medicaid reimburses for those
services. Federal guidance is needed to help states expand reimbursable services by
using nontraditional workforces, including family and youth peer support specialists.
Telemedicine and digital services also counteract the effects of workforce shortages.

3. Promote “Place-Based” Services to Serve Children
and Parents Where They Are
Coverage of services needs to be expanded to include services delivered where
children spend most of their time (e.g., homes, schools, and communities). This
should include support for evidence-based parenting programs, early intervention
skills training, and school readiness (e.g., early literacy and reading). These kinds of
services do not fit within the traditional model because they are delivered outside
of specialty mental health clinics and do no necessitate a mental health diagnosis.
NASEM’s recently formed Collaborative on Healthy Parenting in Primary Care has
identified specific policy opportunities for delivering evidence-based parent support
programs and family-focused interventions (e.g., Triple P and Incredible Years) in
primary care, 48 but these are not reimbursable under Medicaid or CHIP. In addition,
the U.S. Preventive Services Task Force recently recommended both public and private
insurance coverage for family-focused interventions as a preventive measure.
Embedding reimbursement codes for these kinds of services would facilitate children’s
healthy development. Current Medicaid regulations do not overtly promote
parent enrollment in evidence-based parent training programs; only 12 states report
that Medicaid pays for parenting programs (and only two of these states, Michigan
and Oregon, require providers to use an evidenced-based parenting program); 37
states (76%) report that they do not cover these services, 49 despite evidence of their
effectiveness 6,50,51 as well as their significant cost-benefit savings. 52 Finally, current
Medicaid policy design sometimes promotes discontinuous coverage and disruption
of services for many of the highest-risk children when there are minor changes in
residence, foster care transitions, and eligibility changes due to disability.
Another potential avenue for expanding place-based coverage is through the Home
and Community-Based Services (HCBS) Waiver program, authorized by the Social
Security Act. This program allows for the provision of standard medical and nonmedical
services in the home or community. The target of HCBS services is individuals
with established diagnoses and usually those who already have tangible
impairments. As such, this “flexible” model is not able to provide developmental
interventions for children who are high risk of not flourishing (i.e., who have multiple
ACEs), because these children are not yet diagnosed or disabled. HCBS services
have begun to revolutionize care for children with autism spectrum disorders, with
covered behavioral interventions aimed at improving functioning. Such an approach
would be very useful for children who have experienced multiple ACEs. This would
require redefining eligibility, perhaps by limiting access to children with high ACE
scores (e.g., three or more), linking the services to full-service pediatric practices,
Redesigning Federal Health Insurance Policies to Promote Children’s Mental Health
16

and defining the scope of intervention (e.g., number and type of sessions). Federal
guidance could consider piloting, via a limited waiver opportunity paired with a robust
evaluation, HCBS services coordinated by full-service pediatric practices (using
collaborative care bundled payments) for young children at high risk of developing a
behavioral health diagnosis. The services should be focused on evidence-based interventions
and circumscribed as appropriate in terms of amount, scope, and duration.
4. Further Develop Innovative Payment Models and Tools to
Promote Prevention and Early Intervention Programs
More sophisticated, complex, creative, and sustainable financing mechanisms are
needed to fund early prevention and intervention programming. Some states are
finding innovative ways, in the absence of federal guidance, to invest in the early
years. Oregon’s “At-Risk Codes” allow payments for early intervention to reduce the
development of serious mental health conditions later, 53 and New York State’s “First
1,000 Days of Medicaid” recognizes that a child’s first three years are the most crucial
years of development. 54
New Payment Models
Several CMS efforts have attempted to address the development of new payment
models, including CMS’s 2017 Request for Information on Pediatric Alternative
Payment Model Opportunities, 55 which sought input on the design of alternative
payment models to improve the health of children and youth covered by Medicaid
and CHIP and focused on concepts that encourage pediatric providers to collaborate
with health-related social service providers at the state and local levels. However, no
further follow-up or request for proposals (RFP) has been issued (as of July 2018). CMS
also funded 31 demonstration projects under the Accountable Health Communities
Model and developed a Health-Related Social Needs Screening Tool. 56 Opportunities
exist to provide additional technical assistance to communities to further develop
these needed models, with a focus on pediatric ACOs and expanding value-based purchasing
mechanisms to include pediatric health and behavioral health. To date (July
2018), no RFPs or further federal policy regulations or policy guidance exist to support
broader implementation of these alternative financing models/mechanisms.

Pediatric ACOs
Pediatric ACOs began nearly two decades ago. However, utilization of this model is
not widespread and is exclusively affiliated with large hospital systems. As such,
the variability across models—due to state-to-state differences in Medicaid and lack
of federal guidance on structure and financing—has made existing pediatric ACO
models nationwide difficult to compare, align, or regulate for best practices. 57 Two
recent evaluations of pediatric ACOs, one of early adopters and another profiling
hospital-based models, found a need for more complex financial models to account
for the long-term investment and short-term savings. Further, the cost-savings
goals tend to take precedence over measurement of quality, and there is a need for
development of ACO quality measures. 57,58
One example of a pediatric ACO model is Nationwide Children’s Hospital Partners
for Kids (PFK), one of the oldest pediatric ACOs (founded in 1994) and a full-risk,
population-based model that receives a Medicaid per-member per-month age- and
sex-adjusted payment. PFK has demonstrated lower costs than fee-for-service or
managed care organizations. Importantly, this slowing in cost growth was achieved
without losses in overall quality or outcomes of care. 59 In addition, PFK’s care
coordination reduced inpatient and emergency department utilization. 60
Value-based purchasing
In the past decade, many states have undertaken significant efforts to overhaul
their Medicaid plans, 61,62 with reforms aimed at moving away from fee-for-service
toward increasing the value of the care they are providing. However, these efforts
are happening in the absence of federal guidance, leading to uncertainty and
inefficiencies. These include integrating primary and behavioral healthcare
and replacing fee-for-service payments with reimbursements based on clients’
attainment of health outcomes. 63,64 Two-thirds of children and youth covered by
Medicaid and CHIP are now in managed care. 65
Examples of state innovations include Oregon, which has created coordinated care
organizations that are locally governed to address community needs on a single
global budget, and New York State, which is implementing the Delivery System
Reform Incentive Payment program and Performing Provider Systems to restructure
Medicaid to reduce avoidable hospital use by 25% over five years. However, few
children are hospitalized, and this focus in New York effectively excludes pediatric
services. 66 Minnesota is piloting Certified Community Behavioral Health Centers and
Health Home initiatives to coordinate care across settings and providers. 67 These
state innovations are using more complex financial models to try to provide more
flexible services, but they are not primarily targeted at children or at promoting
children’s healthy development. This needs to change.
Redesigning Federal Health Insurance Policies to Promote Children’s Mental Health
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Return on Investment tools
States would also benefit from the development of tools that allow them to calculate
their return on investment (ROI) in early prevention and intervention programming.
A recently published Commonwealth Fund “return-on-investment calculator”
(Assessing Risks and Rewards of Integrating Social Services with Health Care)
enables policymakers to weigh the value of partnerships/investments in social
services that are likely to improve medical outcomes. 68 An adaptation of this tool
for investments in early prevention and intervention programming for children
could provide state policymakers with data regarding their investments in these
prevention and early intervention programs. An important caveat, however, is
that it is unethical to hinge treatment on purely financial calculations. ROI tools
for prevention are not required for other health conditions (e.g., cancer and heart
disease). Nevertheless, it would be useful for planning purposes to know probable
ROIs for prevention programs for children. ROI analyses can be a useful tool to
encourage expanded coverage by states. For example, since the late 1990s, the
Washington State legislature has directed the Washington State Institute for
Public Policy (WSIPP) to calculate the ROI to taxpayers from a variety of education,
prevention, and intervention programs and policies. Today, WSIPP provides ROI data
for an extensive range of programs and policies to guide decision making at the
state level. 52

4 Conclusions
Mainstream federal policies that address children’s health needs—Medicaid, including
EPSDT, and CHIP—are not designed to promote healthy development or to
address the unique needs of children. We call for a redesign of these programs to
include development of billing codes and payment options to enable frequent monitoring
of children’s development (periodicity); training, technical assistance, and
coverage of a range of credentialed, nontraditional providers; expansion of covered
settings; and adoption of payment models at a systems level to create a sustainable
structure. Supporting children necessitates equal attention to supporting—even
nurturing—their families and communities to create the conditions for positive development
and life-long functioning. Federal health policy must keep pace with the
scientific evidence on what is known to create the conditions for future generations
of children to thrive.
Redesigning Federal Health Insurance Policies to Promote Children’s Mental Health
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References
1 / Medicaid’s Role for Children with Special Health Care
Needs: A Look at Eligibility, Services, and Spending.
Menlo Park, CA, Kaiser Family Foundation, 2018.
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Redesigning Federal Health Insurance Policies to Promote Children’s Mental Health

How to use this paper to
“Think Bigger” and “Do Good”
1 Send the paper to your local, state, and federal
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2 Share the paper with mental health and substance use
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The Scattergood Foundation believes major disruption is needed
to build a stronger, more effective, compassionate, and inclusive
health care system — one that improves well-being and quality of
life as much as it treats illness and disease. At the Foundation, we
THINK, DO, and SUPPORT in order to establish a new paradigm for
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4 Link to the paper on your organization’s website or blog
5 Use the paper in group or classroom presentations
6 Redesigning Federal Health Insurance Policies to Promote
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Philadelphia, PA (Fall 2018) www.thinkbiggerdogood.org
Peg’s Foundation believes in relevant and innovative, and at times
disruptive ideas to improve access to care and treatment for the
seriously mentally ill. We strive to promote the implementation of a
stronger, more effective, compassionate, and inclusive health care
system for all. Our Founder, Peg Morgan, guided us to “Think Bigger”,
and to understand recovery from mental illness is the expectation, and
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F O U N D A T I O N
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